Washington (Platts)--16Nov2012/341 pm EST/2041 GMT

A court decision rejecting a rule by the US Environmental Protection Agency to curb interstate air pollution from power plants should stand because the agency erred in not allowing states to draw their own strategies to meet regulations as encouraged under Clean Air Act's "cooperative federalism," state petitioners against the rule told the court Friday.

Rather than allowing states covered by the new rule to craft their own implementation plans, the EPA's Cross-State Air Pollution Rule "simultaneously identified the covered states, defined their obligations and imposed federal implementation plants, or FIPS, implementing those obligations as EPA saw fit," state and local petitioners said in a court filing in response to EPA's request for rehearing.

"That displacement of the SIP process left the states in the new transport rule region with no choice, contravening the cooperative federalism that both the Supreme Court and this court have recognized as a distinctive feature of the CAA," the petitioners said.

Article continues below...

Request a free trial of: Electric Power Daily
	No other daily publication delivers so complete an account of North American power industry news as Electric Power Daily. For those who need solid grounding every day in this complex arena where so much is at stake, Electric Power Daily is a must read.

The 14 state petitioners also argued that the "FIP-before-SIP" issue was properly raised during the court proceeding, making the ruling against the EPA transport rule valid. Industry and labor groups that sued EPA over the rule are also expected to file a response to the court on why it should deny the agency's request for rehearing.

EPA is seeking a rehearing en banc of the US Court of Appeals for the District of Columbia Circuit of the August 21 split decision of EME Homer City Generation v US EPA (No. 11-1302) that vacated and remanded its Cross-State Air Pollution Rule.

A three-judge panel ruled 2-1 that the regulation violated the Clean Air Act in two key areas: the "good neighbor" provisions to address upwind states' pollution of downwind states and the installation of federal implementation plans, or FIPs, without giving states a chance to develop their own implementation plans first.

EPA crafted the rule to replace the Clean Air Interstate Rule and address transport pollution from half the country's fossil generation. CAIR remains in effect until the agency comes up with an appropriate replacement.

The cross-state rule covered coal and oil plants in 28 states in the East, South and Midwest. EPA set regionwide cost-per-ton threshold for the three pollutants -- sulfur dioxide, annual nitrogen oxides and ozone-season NOx.

EPA issued CSAPR last year to replace CAIR starting January 1, 2012, but the DC Circuit, acting on numerous petitions challenging the new rule, stayed the new rule pending a decision by the court on its merits.

--Cathy Cash, cathy_cash@platts.com
--Edited by Jason Lindquist, jason_lindquist@platts.com

Tweet